Democrats created bad economy, recession
Sept. 28, 2012 at 4:28 a.m.
Editor, the Advocate:
The upcoming election is going to be the most important one in our nation's history and will determine the direction our nation will take - Socialism or Capitalism. I believe it is important to understand the history and the Democrats' role in the housing collapse that triggered the recession.
In 1977, the Democratic President Jimmy Carter signed a bill, the Community Reinvestment Act (CRA). This bill would encourage depository institutions to meet the credit needs of communities they serve, including low and moderate neighborhoods consistent with "safe and sound banking operations." Unfortunately, lenders were constantly under the Democrats' pressure to make more home loans per CRA criteria or face restrictions on their operations.
Lenders sell most of their loans in the secondary market to purchasers like government agencies known as Freddie Mac, Fannie Mae and Fannie Mac. They package these loans into pools and sell them as mortgage-backed securities to investors on the open market. Due to lack of government oversight, safe and sound backing procedures were not followed leading to lax underwriting procedures, political favors and sweetheart deals, corruption, fraud, etc. These activities remained undisclosed by the Democrats. George Bush asked for a significant overhaul of the housing finance industry in 2003, but Democrats opposed it. Bush tried several times to get Congress to investigate potential problems with Fannie Mae and Freddie Mac. These efforts were opposed by Obama (as a senator) and later by Chris Dodd and Barney Frank, leaders of financial committees in the Senate and House. If anything, Obama inherited a bad economy caused mainly by his own party.
Regarding the economy, there is one main reason the economy is not recovering like Obama promised. This involves his ill-advised health care law which he hustled through Congress in the middle of a serious recession with the national debt at record levels. This new law has caused chaos in the economy and business/corporate world. Until political issues and uncertainties are solved, business/corporations will be reluctant to expand or provide new jobs.
I recommend seeing the movie "2016" about Obama and his political ideology - it's scary.
Allen J. Novosad, Edna